(Adds background on nuclear power in PJM and other companies considering closing reactors in the region, quote from Exelon)
May 24 (Reuters) - Exelon Corp, the biggest U.S. operator of nuclear power stations, said on Thursday three of its plants did not clear in the 2021-22 auction to supply the PJM grid's Mid Atlantic and Midwest region, losing out to lower-cost generators.
Companies with units that clear in the auction with more competitive prices will be paid to ensure enough energy resources are available in the June 2021-May 2022 delivery year.
Exelon said its 803-megawatt Three Mile Island, 1,797-MW Dresden and all but a small portion of its 2,300-MW Byron nuclear plant did not clear the auction.
This marks the fourth consecutive year that Three Mile Island, located in Pennsylvania, failed to clear in the auction. Exelon has said it plans to shut Three Mile Island which has not been profitable for six years, in October 2019.
Exelon said it did not plan to retire either Dresden or Byron, which have access to payments under a program to reduce greenhouse gas emissions in Illinois.
"Now, more than ever, we need federal, regional and state policymakers to urgently take action to preserve the benefits that our nation's largest and most resilient source of emissions-free energy provides to our customers," Kathleen Barrón, Exelon's senior vice president of government and regulatory affairs and public policy, said in a statement.
Cheap natural gas from shale fields has depressed power prices over the past several years, making it uneconomic for generators to keep operating some nuclear plants.
Across all of PJM, 10,643 MW of nuclear capacity did not clear in the auction, the most ever, Exelon said, compared with 3,243 MW that failed to clear last year. One megawatt can power about 1,000 U.S. homes.
PJM operates the nation's biggest power grid. Its territory covers 13 states from New Jersey to Illinois.
Of the 99 U.S. nuclear reactors, which are capable of generating about 99,300 MW, 33 are in PJM. Those 33 reactors are capable of producing almost 34,000 MW.
Of those, six reactors, totaling almost 5,400 MW of capacity, have already announced plans to retire over the next few years, including Exelon's Three Mile Island and Oyster Creek in New Jersey, which did not participate in the auction, and FirstEnergy Corp's Davis-Besse and Perry in Ohio and the two units at Beaver Valley in Pennsylvania.
Officials at FirstEnergy were not immediately available for comment.
Exelon said it continues to work with federal and state officials and PJM on broader market reforms that could keep Three Mile Island and other nuclear units from shutting.
PJM is developing a plan to change the way the market compensates generators for the energy they produce, which could increase revenues at both coal and nuclear plants.
(Reporting by Scott DiSavino; Editing by Steve Orlofsky and Marguerita Choy)